Essay on Renovating Home Depot

5090 Words21 Pages
Question 1. Organizations as Complex Systems. (16 points). Using the 7S model, please identify two S’s that Mr. Nardelli has changed successfully, and two S’s that he has not changed successfully or is having trouble changing successfully (in that he is needing to replace a large number of people, etc. to accomplish the changes). For each, please name the “S” and in 2-3 sentences explain why you say that he has or has not changed the “S” successfully. Home Depot had an enormous growth of achieving $40 billion in revenue in 20 years. However its sales started to stagnate, unable to cope up with the fast growth. Mr Nardelli identified some of the problems, key being appropriate structure and systems to support a strategic growth…show more content…
People were trained to develop subordinate leaders. Power systems – to squeeze out efficiencies out of the core business to fund the new business. An example is centralized purchasing which needs a very strong process and technology backing to consolidate, route, procure and distribute the inventory. Not Changed Successfully 1: Name of the S: Shared Values Explanation: Home Depot had a decentralized and entrepreneurial retail culture that focused on knowledge of the industry, customer service, empowering employees and collaboration. Mr Nardelli converted this culture to a command control and performance focused. The performance was measured by operational efficiency and cost reduction. The decisions were made at corporate and managers had to comply with the strategy. So the need was for people who could execute the decisions mechanically without questioning the management. This is a typical manufacturing culture. Mr Nardelli forced this culture in Home Depot with no knowledge of retail or prevalent culture of Home Depot. A highly fearsome culture was brought in that penalized entrepreneurship and risk taking – huge numbers of people were terminated at executive and managerial level. The experienced senior people were replaced by low wage part timers to cut costs. While wage of employees was not increased,
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